TOYOTA is pulling no punches with the launch of the fourth generation RAV4 compact SUV.

Completely redesigned and with a class leading new diesel engine in the line up, the latest RAV has its sights set on pole position in the leisure vehicle market.

And with prices kicking in cheaper than those of the previous model Toyota is out to give the likes of Kia and Honda a run for the money.

The new RAV4 costs from £22,595 and that is almost £2,000 lower than before while the eight model range tops out at £29,295.

The new diesel features in the entry level front wheel drive RAV which with CO2 emissions of 127g/km and official fuel economy figures of 57.6mpg is the most economical non-hybrid SUV on the market.

Four wheel drive versions - which cost from £26,495 - are not that far behind averaging 49.6mpg according to Toyota. The solitary petrol model is a two-litre with a CVT gearbox and that is claimed to be good for 39.2 to the gallon.

In the real world we saw 49.6mpg from the 2WD model and 37.6 from the 4x4 which for a vehicle of such proportions is nothing to be moaned about although not quite what it says on the box.

The latest RAV4 is larger than the outgoing model and sharply styled taking on Toyota's wide face and notched rear with prominent lamp clusters.

The tailgate is now hinged from the top as opposed to the side and on all but the entry level versions is power operated.

It opens to about six feet but a clever device allows the height to be set lower for shorter people.

Getting stuff in is easier than before which is not purely down to the architecture of the tailgate but also thanks to a low load lip and wide aperture.

Cargo space ranges from a useful 547 litres to 1,741 which is relatively huge and the absence of a spare wheel frees up another 100 litres of space below the boot floor.

For action families there is plenty of flexibility and leg room in the back is surprisingly generous.

Comfort throughout the cabin has been improved and noise on the move reduced significantly.

A restyled dashboard complete with touchscreen, soft facing plus carbon fibre-effect inserts in the trim is quite techno and positions the new RAV4 upmarket.

On the road the new two-litre diesel engine has plenty of pull. Not only is it economical but is delivers 0 to 60 acceleration of 10.5 seconds. It is mated to a six-speed manual gearbox and stop/start is fitted as a further economy measure.

Although cheaper to buy and run, the 2WD RAV is not as composed as the heavier 4x4 version which uses a 2.2-litre diesel generating 148bhp as opposed to 122.

The bigger engine also features a sport mode which produces more weight in the steering and gives a more bite to the throttle. All in all it improves the feel of the vehicle considerably.

There is also a torque vectoring system which delivers good grip when cornering but both versions exhibit a touch of body roll and that is more pronounced with the front wheel drive set up.

Toyota is using bold names taken from its larger off-roaders on the new RAV4 which comes either in Active, Icon or Invincible trim - the latter including posh touches such as leather upholstery, heated front seats and keyless entry.

The Icon is the mainstream model and comes with plenty including dual zone air conditioning, cruise control and Toyota's Touch multimedia system which adds a digital radio, Bluetooth and a high definition rear view camera.

Adding sat nav to the system is a £750 option and blind spot monitors are a further extra.

Most of the dash is well laid out, smart and functional but there are some switches lurking in a recess in front of the centre console and others to the side of steering wheel.

The RAV4 is still more a soft roader than full blown mud-plugger but then so are its key rivals and over the years Toyota has gathered quite a following for its medium SUV.

It has become particularly popular with those who tow and the new one can handle two tonne trailers as a four wheel drive or 1.6 tonnes when only 2WD.

The original RAV hit the scene in 1994 and although it is now available only as a five-door it has moved with the times clocking up more than 4.5million sales worldwide.

Each generation has shifted the recreational vehicle concept up a notch and the changes deployed on the latest RAV take the top grade models in the premium zone up against the likes of the Audi Q3 and BMW X1 - although it is still not quite in the same league as the Range Rover Evoque.